On Friday, the Treasury Division up to date the best way it classifies autos that qualify for its $7,500 EV tax credit score as a part of the Inflation Discount Act (IRA). The change ought to enable extra autos — together with the Mannequin Y — to qualify for the credit score, because it not places sure SUV crossovers in the identical class as sedans.

Beforehand, some fashions of the Mannequin Y, alongside the Cadillac Lyriq, weren’t eligible for the EV tax credit score as a result of their sticker costs exceeded the utmost $55,000 instructed retail value for sedans.

However now that the federal government makes use of the Environmental Safety Company’s (EPA) Gasoline Financial system Labeling commonplace as a substitute of the EPA’s company common gas financial system (CAFE) commonplace to categorise autos, the Mannequin Y and Cadillac Lyriq now fall underneath the SUV class. This provides Tesla extra wiggle room with regards to pricing, as autos on this class could be priced at as much as $80,000 to qualify for the tax credit score.

It’s nonetheless unclear how the Treasury Division’s record of certified autos will change come March, although. That’s when the company’s anticipated to launch its steerage on apply the IRA’s strict guidelines surrounding the sourcing and manufacturing of the minerals and battery elements utilized in EVs.